Canadian Shoppers in NYC Undeterred by Rising Dollar
The Canadian dollar may be trading at its weakest level against the U.S. dollar in 11 years, but that is not deterring people from making the trip south of the border and enjoying their stay. In the trendy shopping districts of New York City, Canadians are unperturbed by the $1.33 per U.S. dollar exchange rate, the steepest it has been since May, 2004.
“About 85% of our customers are tourists, and most of them are from Canada. They come here a lot… and they all buy multiple items,” said Fatima ViVa-La, retail sales associate at the Soho branch of Japanese casual fashion retailer Uniqlo.
The Canadian dollar was last at par with the U.S. dollar in February, 2013, following a year-long run of hovering at or above par. It has been on a downward slide ever since, fuelled by both the strengthening U.S. economy and the recession in Canada due to historically low oil prices. According to the U.S. Federal Reserve, the cost for Canadians to buy U.S. dollars has increased by 23.4% since the beginning of 2014.
Despite that, the impact on the number of Canadian visitors to the U.S. and their spending habits have been miniscule, according to data from the U.S. Department of Commerce’s International Trade Administration.
In 2013, 23.4 million made the trip across the border, including 1.1 million heading for the Big Apple. They spent a record-setting $27.9-billion, surpassing even the Chinese big spenders who dropped $21.1-billion. In 2014, the head count declined slightly for all of U.S. to 23 million and remained the same for NYC. Spending also decreased by only a fraction to $27.2-billion.
The figures appear to hold true in the retail shops of NYC. When asked whether the store is receiving complaints from Canadians about the exchange rate or seeing lowered sales, Uniqlo’s ViVa-La answered, “No, not really. They are willing to pay the difference or however much [the price of] the item is.”
However, Uniqlo is likely benefiting from market exclusivity since it is currently unavailable in Canada (although that will soon change as the company is making its Canadian debut in 2016 with two flagship stores in Toronto).
But even for yoga and athletic wear giant Lululemon, which was founded in the West Coast city of Vancouver, B.C., the exchange rate has not impacted sales to Canadian tourists, according to Andrea, brand ambassador at the West 14th branch in the Meatpacking District. She said Canadians are typically under the impression that it is cheaper to buy things in the U.S.
The assumption does not apply to Lululemon however, as the company sets the same price on its products for both countries. That means for a pair of “high times pant,” one of its bestsellers, Canadians would be paying $98 in the U.S. instead of $74 back home (both figures in USD).
Due to geographical convenience and ease of entry, Canadians make up the largest group of visitors to the U.S. and account for about 30% of visitor volume each year. They are also responsible for 12% of the country’s tourism income.
So if past trends are indicative of future developments, then Americans need not fear that the dwindling Canadian economy will affect their flourishing one. As John Yin, doctor in residency from Vancouver, B.C., puts it, “Yes it is bad… but I just try not to think about it.”
